Here is a question to answer before you order new signs: does the corporation really need to change its legal name? Plenty of owners assume they do, when a registered business name would give them what they want at a fraction of the effort. Others do the reverse, trading for years under a brand while their numbered company’s legal name stays hidden on the invoices, and then find that a lender or a major customer wants the paperwork to match.
A legal name change is one type of amendment to a corporation’s articles. The articles are its foundational document, setting out things like its name, share structure, restrictions on share transfers, and the number of directors. They can be changed, and the process is manageable. It does, however, involve a proper corporate decision, a registry filing, and an after-the-fact cleanup that is easy to underestimate.
This is general information and should not be taken as legal advice. Your articles, shareholder agreement, and lending documents may add conditions that this summary cannot anticipate.
A Legal Name Change or a Business Name?
Start by sorting out what you are actually trying to accomplish.
A corporation’s legal name appears in its articles and on the public record. Changing it requires articles of amendment.
A business name, sometimes called an operating name or trade name, is a name the corporation uses with the public, registered under Ontario’s Business Names Act. A company legally called 1234567 Ontario Inc. might trade as “Hurontario Auto Glass”. Ontario’s fee table lists $60 for a new registration or renewal, and a registration lasts five years before it must be renewed.
A business name can be the better choice if you are testing a brand, adding a second line of business, or keeping an existing corporate name that has value with banks and suppliers. There are two conditions to keep in mind. The legal name should still appear where the law expects it, including on contracts and invoices, and registering a business name gives you no exclusive right to it. Another company can register a similar one, and you may face a complaint from an existing business if your name is confusing.
The legal name route makes more sense when you want a single consistent identity, when you are rebranding after an acquisition or a change of ownership, or when a numbered name is making life harder with customers and lenders.
In either case, a registry filing is not a trademark right. If you care about the brand, consider a separate intellectual property review before spending on signage.
What Can Be Changed by Articles of Amendment
Under section 168 of Ontario’s Business Corporations Act (OBCA), a corporation may amend its articles to add, change, or remove any provision that the Act permits to be set out in them. The most common changes are:
- changing the corporation’s name
- creating new classes of shares, such as a class for a family member or an investor
- changing the rights attached to a class, or subdividing or consolidating shares
- changing the minimum and maximum number of directors
- adding, removing, or changing restrictions on transferring shares or on the business the corporation can carry on
Some things people associate with corporate changes do not require articles of amendment at all. A change of directors is generally handled by corporate resolution and a notice of change under the Corporations Information Act, normally filed within 15 days. The registered office works in a similar way. Under section 14, the directors can move it within the same municipality by resolution, while moving it to a different municipality, say from Brampton to Mississauga, takes a special resolution of the shareholders. Neither step requires articles of amendment, but the notice of change still has to be filed.
Who Has to Approve It
Most amendments under section 168 must be authorized by a special resolution of the shareholders. That means at least two-thirds of the votes cast at a meeting, or the written signature of all shareholders entitled to vote. In a corporation with one or two owners, the paperwork is simple. If there are several owners and you are not all on the same page, it becomes the main issue.
Several rules can complicate things:
Class votes. Under section 170, holders of a class or series of shares may be entitled to vote separately on amendments that affect them, for example by adding rights ranking ahead of them or changing their shares’ rights, even where the shares are otherwise non-voting. Family corporations that have several classes of shares from past tax planning should take particular care.
Dissent rights. Under section 185, certain resolutions allow a dissenting shareholder to demand payment of the fair value of their shares. The list includes amending the articles to add, remove, or change restrictions on the issue, transfer, or ownership of shares, or a restriction on the business the company can carry on. A simple name change is not on that list, but some other amendments that may be bundled with it could be.
Your own agreements. A unanimous shareholder agreement, or an ordinary one, may require a higher approval level or consent from a named investor. Your bank’s covenants may demand notice or consent for changes to the name or share capital. Breaching a covenant to tidy up the name is an unfortunate way to surprise a lender.
The directors may also be authorized by the special resolution to revoke it before the amendment takes effect. That can be useful if the name becomes unavailable or a deal falls through.
The Solvency Rule Most Owners Have Never Heard Of
Subsection 171(3) of the OBCA says that no corporation shall change its name if it is unable to pay its liabilities as they become due, or if the realizable value of its assets is less than the aggregate of its liabilities. The reason is intuitive. A name change must not become a way for a struggling business to disappear from its creditors’ view.
A business in financial trouble should get advice before it tries to rebrand. A company that uses a name change along with a transfer of assets to a new entity may also be challenged for other reasons, and directors can be exposed if the arrangement looks like an attempt to avoid creditors.
Choosing and Clearing a Name
For an Ontario corporation changing to a word name, you will generally need an Ontario-biased NUANS name search report, dated no more than 90 days before the filing. The report lists similar names and trademarks, but it does not decide whether your name is safe. The onus is on you to review the results. A name that is too similar to an existing one may be refused or challenged later, and a corporation can be ordered to change its name.
The name must also meet the OBCA’s rules, including having a legal element such as Limited, Ltd., Incorporated, Inc., Corporation, or Corp. Certain words or suggestions, such as implying government approval, are restricted.
Go beyond the mandatory search. Look at the Canadian trademarks database, do a plain internet search, and check domain and social media handles. A name that clears NUANS can still infringe someone’s registered trademark or attract a passing off claim from a nearby business with the same name.
Filing, Fees and Federal Corporations
Ontario corporations file through the Ontario Business Registry. Ontario’s fee table lists $150 for articles of amendment filed online, whether handled immediately or in the longer standard period. You will need your company key, the access code that became required for corporate filings. If you never obtained it, sort that out ahead of time, since a closing or a marketing launch that depends on the filing should not be held up by a login problem. If you’ve lost the key, the Ministry has a process to recover it, and it can take time.
Once the filing is accepted, the certificate of amendment shows the effective date. Keep the certificate and the articles in the minute book with the supporting resolutions, because these are what bankers and buyers ask to see.
A federal corporation under the Canada Business Corporations Act uses Corporations Canada instead. The federal process also requires a special resolution in most cases and uses its own form, and Corporations Canada’s service page lists $200 for an online amendment. Its naming policy has some differences, and a federal corporation operating in Brampton also has Ontario filing obligations under the Corporations Information Act, so a change at the federal level should be followed by the appropriate Ontario update.
The Cleanup Nobody Budgets For
The legal entity does not change when a corporation changes its name. Its contracts, debts, and assets all stay where they were, and someone suing the old name is still suing the same company. The trouble is that third parties and public records do not update on their own. Use a list like this one:
- CRA: business number accounts for corporate tax, HST, and payroll.
- Government accounts: WSIB, Employer Health Tax, and any federal or provincial licences or carrier registrations. A Brampton trucking company should check CVOR and insurance documents.
- City licences: any business licence issued by the City of Brampton in the old name.
- Bank and lenders: accounts, cheques, signing authorities. A secured lender will need to update its Personal Property Security Act registration, since a filing under an old debtor name can lose priority if not amended promptly.
- Land: if the corporation owns real property, register the change on title. Do this before a sale or refinancing, not during it.
- Contracts: major customer, supplier, and lease agreements. Most do not require a formal amendment, but give notice and check whether any clause requires it.
- Insurance: tell your broker, so that a claim will not be delayed by a name mismatch.
- Employment records: payroll, benefit plans, and employee contracts. A name change alone is not a change in employer.
- Trademarks and domains: record the change of owner’s name on any trademark registration, and update domain records.
- Everyday materials: website, invoices, email signatures, purchase orders, signs, and vehicle decals.
Keep Your Own Story Consistent
Keep a simple one-page record of the old name, the new name, and the effective date, and tell your staff when it takes effect. A bank letter, a landlord notice, and the first invoice sent under the new name should all tell the same story. Some companies also add “formerly known as” for a period on invoices to help customers and their accounts payable departments.
Keep the old name protected for a while where you can. Once it is gone from your record, someone else may be able to use it, which is a real concern if the brand carries goodwill. Consider also registering it as a business name, if that suits your plan.
When a Bigger Conversation Is Needed
Often, a name change is the visible part of something bigger: a new investor, a family member being brought in, a partner leaving, or the sale of the business. In those cases, the articles may need a new class of shares and the shareholder agreement a rewrite, all in the proper sequence. A lawyer can often combine these steps so that everything is filed once and done correctly.
Our corporate law group can help with this kind of change, from a simple rename to a broader reorganization of a corporation. Bring your articles, minute book, and shareholder agreement to the first conversation, and write down the reason for the change. It usually determines which route makes the most sense.